Munger Says Costco Beats Charity as Buffett Signs Up Donors

Sept. 17 (Bloomberg) -- Charles Munger, the business
partner of billionaire philanthropist Warren Buffett, said
private investment may advance society more than charity.

“I believe Costco does more for civilization than the
Rockefeller Foundation,” Munger, 86, told students in a
discussion at the University of Michigan on Sept. 14, according
to a video posted on the Internet. “I think it’s a better
place. You get a bunch of very intelligent people sitting around
trying to do good, I immediately get kind of suspicious and
squirm in my seat.”

Munger is a director at Costco Wholesale Corp., the largest
U.S. warehouse-club chain, and has served as vice chairman of
Buffett’s Berkshire Hathaway Inc. for more than three decades.
Munger’s stake in Omaha, Nebraska-based Berkshire’s Class A
shares is valued at more than $1.6 billion.

Buffett, the world’s third-richest person, has committed
more than 99 percent of his wealth to charity and in June
publicly challenged billionaires to give away half their
fortunes. The Rockefeller Foundation, founded in 1913, supports
agriculture in Africa, flood-protection in New Orleans and
universal health initiatives, according to its website.

Charitable donations by Munger have aided California
institutions including Stanford University, the Harvard-Westlake
School and the Huntington Library. He is chairman of Good
Samaritan Hospital of Los Angeles and gave $3 million to the
University of Michigan’s law school to improve lighting.

In the discussion at Michigan’s Stephen M. Ross School of
Business, Munger criticized the World Bank, the international
lending institution that focuses on fighting poverty.

‘Folly and Stupidity’

“I’ve seen so much folly and stupidity on the part of our
major philanthropic groups, including the World Bank,” Munger
said. “I really have more confidence in building up the more
capitalistic ventures like Costco.” A spokesman for the World
Bank declined to comment. Costco’s Bob Nelson didn’t immediately
return a call.

Costco shoppers pay an annual fee for discounts on
groceries and other basics, as well as on pricier goods such as
designer handbags and home furnishings. The Issaquah,
Washington-based company has reported three straight profit
increases, including net income of $306 million in the fiscal
third quarter. The company has more than 140,000 employees,
including part-time staff, according to its annual report.

Munger has previously touted charitable giving. In “Poor
Charlie’s Almanack,” a collection of Munger’s speeches and
remarks, the investor urges successful capitalists to make
donations. Munger gave about $2.4 million in Berkshire stock to
charities on Dec. 18.

‘Duty to Give Back’

“Those of us who have been very fortunate have a duty to
give back,” Munger is quoted as saying in the almanac.
“Whether one gives a lot as one goes along as I do, or a little
and then a lot (when one dies) as Warren does, is a matter of
personal preference.”

Buffett, 80, is depleting his fortune, estimated by Forbes
Magazine in March at $47 billion, through donations. He has
pledged the bulk of his wealth to the Bill & Melinda Gates
Foundation and makes annual gifts to charities seeking to ease
hunger, boost education in the U.S. and promote access to
abortions. He joined with Bill Gates, the Microsoft Corp. co-founder, to start the Giving Pledge initiative to elicit greater
gifts from billionaires.

The Gates Foundation has worked with the Rockefeller
Foundation to increase the productivity of small farms in
Africa. A spokeswoman for the Rockefeller Foundation had no
immediate comment.

Buffett didn’t respond to a request for comment e-mailed to
an assistant. Jason Maier, a spokesman for the Giving Pledge,
didn’t return a call. Munger, through an assistant, declined to
be interviewed. A spokesman for the University of Michigan
confirmed Munger’s appearance this week.